Ohio Lawmakers Drafting Pension Reform Bill

September 18, 2003 (PLANPSONSOR.com) - Ohio
legislators have announced that a reform bill is in the works
that would ultimately subject the state's public employee
pension funds to more ethical, legal, and financial
scrutiny.

While many of the details are still being hammered out,
legislators said their goal is to have a bill approved in
the next month.
“Our immediate concern is to restore the integrity of the
systems,” said State Senator Lynn Wachtmann, who will
manage the Senate bill. “We have $107 billion in assets.
That’s a lot at stake,” Wachtmann said, according to a
Cleveland Plain Dealer report.

Possible provisions of the bill include:

authorizing the
Ohio Retirement Study Council –a legislative oversight committee –to hire a criminal investigator to examine spending
at the five funds

require the filing of financial disclosure statements
with the Ohio Ethics Commission for all pension board
members and certain staff members

require regular performance audits of each retirement
system

ethics and travel policies for all five public
employee funds

provisions to remove pension board members who
misspend money

give retirees more representation through a change in
the composition of several fund boards.

Ohio Gang-Up

The move by lawmakers to introduce reform bills came
after questions were raised earlier in the year about the
spending practices at the State Teachers Retirement System
(STRS).
Among the alleged excessive expenses incurred by the fund
were:

a $94.2-million office building adorned with
$869,000 in artwork

generous fringe benefits for STRS
employees

frequent out-of-state travel for pension board
members

$14 million in employee bonuses.

At the time, then-
STRS Executive Director Herb Dyer said the pension
board was trying to recruit and keep good investment staff
in a competitive profession that pays well and offers good
benefits. “I appreciate that people who don’t do that kind
of work for a living might not understand it, but that’s
the reality of the professionalism involved,” said Dyer
(See
Ohio Pension Fund Hit for Lavish Spending
Practices)
.

However, while the board was paying for these
expenses over that time, the system’s investments plummeted
by $12.3 billion and health-care contributions by retirees
jumped significantly.
The ensuing public outcry caused a major shakeup at
the board that included the suspension of employee bonuses,
limits placed on travel by board members and ultimately
cost Dyer his job (See
Dyer Steps Down From Ohio STRS Post
).